New to this. In this Investopedia article on Delta the following looks like a typo -

How Do Options Traders Use Delta? Delta is used by options traders in several ways. First, it tells them their directional risk, in terms of how much an option's price will change as the underlying price changes. It can also be used as a hedge ratio to become delta-neutral. For instance, if an options trader buys 10 XYZ calls, each with a +0.40 delta. they would sell 4,000 shares of stock to have a net delta of zero. If they instead bought 10 puts with a -0.30 delta, they would buy 3,000 shares.

Let's take the first example. If $\Delta = +0.4$, then the total delta on the 10 XYZ calls is $\Delta \times 10 = + 0.4 \times 10 = + 4$, whereas the other leg has total delta $- 4,000$(?) Since for every $\\\$1$ that the XYZ stock goes up, the change in value of the second leg is $-$$\\\$4,000$. Is the intention here that each call contract on XYZ stock offers the holder the option to buy 1,000 shares of the stock? Even that would be strange, because the typical contract offers the holder the option to buy 100 shares of the underlying, as I understand it.

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    $\begingroup$ You would multiply delta by $10 \times 100 = 1000$ because you have $10$ contracts and each contract is for $100$ shares. $\endgroup$ May 12 at 19:59
  • $\begingroup$ Right, but $0.4 \times 1000 = 400 < 4000$. $\endgroup$
    – Joe Shmo
    May 12 at 20:02
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    $\begingroup$ Yes, it is a typo, "they would sell 400 shares of stock to have a net delta of zero" is the corrected statement. (Beware of Investopedia, it is poorly edited and often wrong on small details). $\endgroup$
    – nbbo2
    May 12 at 20:25
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    $\begingroup$ You can request to have it corrected - select "Article Update" - and choose "Correction" as the article update option. $\endgroup$
    – AKdemy
    May 12 at 20:57
  • $\begingroup$ @AKdemy now that you mention it, I see lots of typos and inaccuracies in lots of their articles. They seem to get a lot of the mathematical details wrong. Can you recommend a better resource that serves a similar purpose? $\endgroup$
    – Joe Shmo
    May 13 at 18:39


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